KEYNOTE SPEECH BY THE EXECUTIVE COMMISSIONER – STAKEHOLDER MANAGEMENT, MR
Nigeria is widely known to be not only Africa’s most populous country but also the largest
economy on the Continent and it is expected that strong economic growth in Nigeria would
generate substantial prospects for growth and spillovers for the whole West African region.
Despite the prospect of accelerated economic growth, the presence of multiple taxation,
which the World Bank has termed ‘nuisance taxes’ 1 has and continues to prove to be a bane
on economic development in the Country. However, before addressing how multiple
taxation is an impediment to economic development, it is important to emphasize that
taxation, in and of itself, is a veritable tool for economic development.
The curious question, which this workshop will attempt to answer, is how a fiscal tool for
economic development like taxation can become inimical to economic development. It is
imperative therefore to correct some misconception about taxation, particularly the
misguided notion of taxation as a penal tool on thriving business enterprise.
Taxation is the backbone for public finance. It provides guaranteed and sustainable sources
of funding for social programs and public investments, it also serves as a tool curated by the
government to effectively and efficiently distribute our commonwealth. It is thus evident
that taxation is critical for making growth sustainable and equitable. Thus, taxation by design
is an instrument for economic development and it is important to acknowledge and support
the initiative of all tiers of Government in using taxation as an instrument for socio-
However, supporting the tax initiatives by the various tiers of Government includes
indicating where a category of taxes have become cancerous to economic development.
These type of taxes typically manifest themselves in the form of multiple taxation and by
design, they reverse growth, stifle innovation and discourage investment. In parabolic terms,
they are the scarecrows mounted by government to disincentivize development.
It is pertinent to note that the National Tax Policy 2017 emphasizes the need to eradicate
multiple taxation at all tiers of government. Specifically, the Policy states that taxes similar to
those being collected by a level of Government should not be introduced by the same or
another level of Government. The Federal, State and Local Governments shall ensure
collaboration in harmonizing and eliminating multiple taxation
1 Impact of Multiple Taxation on Competitiveness in Nigeria, Nihal Pitigala and Mombert Hoppe (March 2011)
Also, the President and Commander-in-Chief of the Federal Republic of Nigeria, His
Excellency, President Bola Ahmed Tinubu, in his commitment to address the vexed issue of
multiple taxation, recently signed a number of Executive Orders to curb arbitrary taxes in
the Country. Also, the inauguration of the Committee on Fiscal Policy, Tax Reforms by the
President, which is geared towards harmonizing taxes will provide an avenue to further
engage various stakeholders in order to identify their pain points and critical concerns
bothering tax and fiscal policies. This would also facilitate a conducive environment for
conducive for local and foreign investment into the country.
What then is multiple taxation? According to the National Tax Policy 2017, Multiple
Taxation is the imposition of the same or similar taxes on the same income base, transaction
or person by one or more levels of Government, in one or more jurisdictions. While a level
of multiplicity is expected in federal system of governance, the levying of a particular tax on
the same person/entity, in respect of the same liability by more than one State or Local
Government Council should be avoided.
The paradox of multiple taxation is that it does not lead to an increment in government
revenue, rather the crippling effect of these taxes, is that it makes otherwise profitable
businesses, unprofitable. It negatively impacts the ease of doing business, shrinks the tax
base, incentivizes tax evasion and complicate tax compliance.
According to the World Bank, taxing a specific tax base will lead to increasing revenues up
to a specific point, after which the overall tax revenue will decline because companies go out
of business, or evasion increases significantly. 2
In addition to these challenges, the economic burden of multiple taxation is further
exacerbated by the administrative burden of complying with these taxes. It further makes
Nigeria an undesirable ground for breeding healthy business and competitive practices. The
effect of this is that, business enterprises in Nigeria struggle to compete with their
counterparts abroad. These incidents weakens our economic foundations, devalues the
symbol of economic strength, which is our currency – the Naira and contracts our gross
This Workshop is therefore an avenue to rethink our approach towards taxation by adhering
to its founding principles. What then are the overarching principles of taxation? 3
- Neutrality: Taxation should seek to be neutral and equitable between forms of
business activities. A neutral tax will contribute to efficiency by ensuring that optimal
allocation of the means of production is achieved.
2 Impact of Multiple Taxation on Competitiveness in Nigeria, Nihal Pitigala and Mombert Hoppe (March 2011)
Efficiency: Compliance costs to business and administration costs for governments
should be minimised as far as possible.
- Certainty and simplicity: Tax rules should be clear and simple to understand, so
that taxpayers know where they stand. A simple tax system makes it easier for
individuals and businesses to understand their obligations and entitlements. As a
result, businesses are more likely to make optimal decisions and respond to intended
- Effectiveness and fairness: Taxation should produce the right amount of tax at the
right time, while avoiding both double taxation and unintentional non-taxation. In
addition, the potential for evasion and avoidance should be minimised.
- Flexibility: Taxation systems should be flexible and dynamic enough to ensure they
keep pace with technological and commercial developments. It is important that a tax
system is dynamic and flexible enough to meet the current revenue needs of
governments while adapting to changing needs on an ongoing basis.
The Policy direction of the Federal Government is that all tiers of government are expected
to align, as closely as possible, to the fundamental principles of taxation. 4
I am however optimistic that this Workshop will sufficiently clarify common mischief on
taxation. That after fruitful deliberations, there will be a renewed zeal towards eradicating
multiple taxes and more devotion to creating business friendly environment for the economy
thrive. Ultimately, this Workshop is an invitation to both the public and private sector to
view taxation as a win-win solution in steering the course of our national economy.
Thank you for our attention and I wish you all productive deliberations.
Mr Adeleke Adewolu
Executive Commissioner, Stakeholder Management
4 National Tax Policy 2017 https://pwcnigeria.typepad.com/files/fec-approved-ntp—feb-1-2017.pdf